Preparing for the Fed's September Meeting.

Airport traffic outpaced 2024 levels in

July and August after running below 2024

levels in May and June. So in other

words, airport traffic's back. Consumer

spending has historically led payrolls

and consumers keep spending. Although of

course they're arguing that there's a

decline here consumer spending per Bank

of America research, but not retail

sales this morning. So retail sales this

morning were fantastic. Uh but you do

have some potential momentum changers to

pay attention to this is per Apollo

research and what they're doing is

they're looking at the last uh you know

spending relative to the last 90 days

and what they're seeing so far they're

still seeing rising momentum in that air

travel but they are starting to see

slowing momentum in other categories.

So, there's a lot that says, "Hey,

August strong. We have reason to be

bullish." And I think that's what sets

up for that Federal Reserve punt.

However, amplifying some of this weekly

data, you always have to be careful

about this when these e research

institutions do this and they're like,

"Oh, you know, hey, we're like things

are slowing down. Things are slowing

down." Does it really matter though? I

mean, look at this. This talk about

growth slowing over here on consumer

spending. Look how volatile these charts

are. I think it's is these are things to

pay attention to, but I don't know that

we're in a position of bearishness

because of we're going to amplify, you

know, some weekly data here. In fact,

the Atlanta Fed just seconds ago

increased their GDP estimate for the

third quarter. Look at what's going on.

You can't be bearish about this. Look at

this. The GDP now estimate has just

risen from 3.09% 09%

to 3.4%

for the third quarter. Uh now measured

on September 16th uh up 3.09% on

September 10th after recent releases

from the retail sales numbers. And we

specifically saw real personal

consumption expenditures growth and real

gross private domestic investment

growth. This gross private investment

domestic growth huge for the economy by

the way that grew uh 6.2 2% which is

huge. And that 6.2% number actually grew

up to 6.9%.

Let's go 69. But anyway, the these are

these are good numbers. So again, yes,

on on the weekly data front. Yes,

Apollo, we could see volatility, but we

always expect to see volatility on the

weekly data fronts, especially when we

compare it to the prior uh, you know, 90

days when we have a little bit more

consistency. So, we'll see. So far,

travel spend also worth noting. Travel

spend up 2.8% year-over-year in the week

ending August 30th.

Debit card spending. Who uses a debit

card? Don't use a debit card. Use a

credit card. Get yourself points. My

favorite, by the way, is um the travel

card. Uh if you travel, best travel

card, meet me.com/cap1.

Really good. I prefer it over AMX. Not

even a competitor. Next best. I I'll

give JP Morgan credit there, but but

I've been mad at JP Morgan. They opened

134 accounts for Epstein. Didn't realize

that withdrawing hundreds of thousands

of dollars of cash was sus. Sorry, I'm

going on a tangent here. I shouldn't I

shouldn't do that. Uh but anyway, debit

card spending growth. Look at this.

debit card spending growth up 3.3%

outpacing credit card spending growth

which is crazy because usually the lower

income uh individuals are going to use

debit cards more frequently. Uh and this

is a sign that you know you're even

seeing spending bumps in some of the

lower levels here. Take a look at this

online retail spending up 8.3%

year-over-year in the week ending August

30th. That's huge. That's absolutely

huge. So this is this is very exciting.

These are good data sets so far. Of

course, it could all flip-flop, but

Federal Reserve meeting tomorrow. I

think the Federal Reserve is going to

punt big time. We're going to get our 25

basis point cut. Don't worry, that's

basically priced in. The Fed's really

unlikely to shock us. Somebody asked us

this morning like, "Hey Kevin, you know,

what are the odds we get something crazy

like a 75 basis point cut or or you

know, even more like some kind of shock

cut as if the Fed's finally waking up

and trying to avoid a recession.

Maybe one in a thousand. I don't see it.

I see much more of a Federal Reserve

that's going to punt and focus on future

data." Now, this took me by surprise.

The Federal Reserve does not actually

have a November meeting this year. So

that means they have a preh Halloween

meeting, which is really interesting

because it means the preh Halloween

meeting is all going to be based on the

data that comes out. ADP jobs numbers

October 1st, BLS jobs numbers October

3rd and Jolts on the 30th. But beyond

that, this is probably not going to be a

hawkish or dovish kind of move. This is

going to be a Fed that says, "Look,

things are fine right now." You know,

CNBC is talking about recession odds

going up from 30 to 40% now based on

their expectations of recession. But

frankly, when we look at some of this

underlying data, you can't help but be

bullish. And look at the retail sales

numbers that came out this morning. The

retail sales numbers were gang busters.

Not only did we beat on retail sales

numbers this morning, but we also

revised higher the prior estimate of

retail sales. This is good. Barons

basically had a great article on this.

They basically made this argument that

even though consumers act like they're

gloomy or they say they're gloomy,

they're still spending money. And that's

because usually human psychology says

you spend money until you don't have it

anymore. And usually you don't have it

anymore when you lose your job, but then

it's too late. Then you've lost your job

and then it's too late to save money,

right? So this is human nature though.

you assume that salary is going to keep

coming in and you don't save. This is

very very normal. It's the same thing

with the stock market. We get greedy

with this idea that the stock market's

going to go up forever and we don't

consider that at some point it's going

to make sense on some overextended

stocks to have trailing stop limits,

which is okay. You know, we've been

talking about trailing stops and they've

been killing it since April because

we've been straight up. I remember in

April saying, "Hey, hey, you know, this

this could actually end up being a

short-term bottom. protect yourself to

the downside with the trailing. But if

we go up from here, your trailings are

going to kill it because you won't sell.

You'll just keep riding up. But look at

the details of these retail sales

numbers here. What do we have? We have

malls and retail stores not doing that

great. But what actually is doing well?

Clothing's up. Thanks, Sydney Sweeney.

What else? We've got e-commerce up, food

and drinking places up. Fantastic.

What's down? Building materials and a

little bit on furniture. furniture a

little volatile over the last few months

because of tariffs pull forward and

otherwise but consistently on building

materials you're negative I mean you had

0.1% growth this month from last month

but you had negative -2.3%

year-over-year.9

since June and -2.5 June to June so

these numbers are great for real estate

which obviously I I don't want to shill

it I I talk about it so much you already

know this I love house hack it's my baby

and uh We love what we find to be a

really competitive time for

construction, building ADUs, building

spec homes, and remodeling properties.

Okay? But you know, we're a real estate

play. So, if you want to invest in

Houseack, you go to houseack.com, read

the solicitation, the BPM, okay? This

video is not a solicitation. All that

said, the data so far is good. I mean,

retail sales this morning advance, we're

expected to come in at 0.2, we got 6.

Xauto, we got 7 versus4 and plus one on

the revision on both of those. on the

control group we were expecting point4

we got 7 really good some of these

surveys like yesterday's Empire

manufacturing survey came in negative it

was expected to be positive this morning

we had the New York Fed services

business activity came in really

negative negative 19.4 versus the

negative 5.8 than they'd expected. So,

you do have these surveys like the PPIs

or the P or the PMIs rather or the S&Ps

that show like little volatility signs.

And I think that's because on a month-

over-month basis, you just tend to get

this up and down, this up and down. And

this is where the Fed, I think, is just

going to look and say, uh, hey, uh, just

like, uh, Toad over here, hi, uh, here's

your 25 basis point cut. We're neither

neutral or we're neither hawkish nor,

you know, dovish. We're just going to

kind of keep looking at the data and the

unemployment rate's good. Retail sales

are holding up. People are spending. Uh,

you know, the Atlanta Fed sees GDP at 3%

for the quarter. Uh, we're revising up

our GDP estimates, even if inflation is

transitory over the next 6 to 12 months.

We are way too early to say that the

economy is falling off a cliff.

Now, is that potentially an oopsie

dupes? Is the Federal Reserve going to

leave us in a recession? Maybe. But so

far, we just keep getting this hard data

that suggests no. I mean, look at what

part of it could potentially be

manipulation by Donald Trump. I don't

know. But I tell you, I woke up this

morning and I was studying those uh

those unemployment claim numbers from

Texas and I got sused out that

potentially a Donald Trump friendly

state is actually adjusting numbers or

or making declaratory statements about

economic data that just favor Donald

Trump.

So, let me explain that. I'm going to go

to the Axios piece so you could see that

a little bit more directly here. Take a

look at this. Fraudulent Texas

unemployment filings cause national

spike. So basically unemployment claims

spiked last week to the highest level

since uh 2021. Usually when unemployment

claims spike, it's too late. You know,

you're you're deep in a recession and

you're actually probably closer to the

end of the recession than the beginning

of the recession. Last week we had a a

modest spike. You know, it wasn't like

an off the cliff, oh my gosh, we're in

recession spike, but it was there was a

spike last week. Immediately, people

focused on Texas, and Texas had about

15,000 more claims than usual. Now,

Texas is a very Trump friendly state.

And so, what a surprise. But Texas ends

up coming out saying, "Oh, yeah, hey,

uh, we're committed to making sure that

we have accurate data." And uh the

spokesperson for the Texas Workforce

Commission has now released a statement

saying, "We've observed an uptick in ID

fraud claims or attempts aimed at

exploiting the unemployment system since

Labor Day."

Huh. That's a convenient way to

basically try to explain away something

that's broadly one of the, you know,

fewer sets of economic data that that is

negative at the moment in favor of

Trump. So, it does make you scratch your

head a little bit like how much are we

actually getting reality?

I don't know. Uh, but so far retail

sales, uh, jobs data could all be

broadly in line with an economy that's

getting ready to soft land. I think

we're at a coin toss, but remember what

the economist said yesterday. It's worth

just reiterating. The economist thinks

that our break even rate could actually

be between 0 to 30,000 jobs per month.

Our last 3-month moving average is

29,000 jobs created. That's a very slow

growth economy and it's very unusual.

It's just sort of like an economy that's

slugging along. But the hope is that

maybe next year we could start booming

again. That we get through this soft

patch here this winter. People keep

spending and we can get back to growth.

that this was all just a normalization

post tariffs or whatever. So, I'm

optimistic on that. It's one of the

reasons why we have 10 stocks to buy for

the next 10 years in the meet Kevin

membership, but we also have 10 stocks

not to buy for the next 10 years, which

I think is almost equally as important.

Uh, but anyway, consider the Federal

Reserve tomorrow and the dot plot. So,

the dot plot, here's the dot plot that

we had last time. I think the Federal

Reserve gives us a very benign move up

in GDP, especially with there. I

wouldn't be surprised if ends up

giving you a really big outlier right

here. I bet you is going to come

in. uh will give you 3%. Like

you're going to have a big move over

here to the hot side. Not a surprise.

But again, it's it's Trumpian influence

that's going to move these averages. If

Moran comes in and gives you I mean I

think they I mean they use median over

here purposefully for this, right? Like

thank goodness they use median. But the

point is this range over here will be a

lot higher my take because of and

I wouldn't be surprised if you have a

low read over here because comes

in and gives you 2%. So some of our data

is getting manipulated in my opinion and

there is a risk you know when Donald

Trump fires people at the labor

department because he doesn't like the

data and doesn't understand how

revisions work. Well, that's a problem.

Shout out to Sarah Isa, by the way. I

don't know why that top looks awesome

today. It just it's all perfect. I love

that. I Sorry, I got distracted there.

Oh, look, the 10-year Treasury yield.

That's actually what I meant to look at.

Look, we're almost under 4%. Anyway, so

so think about this for a moment. You've

got uh you're going to have show

up on a low dot here as well, right? So,

Moran will show up low. uh you know he's

going to be the lowest over here. I mean

you could potentially see him over here

uh which is is remarkable. I wouldn't be

surprised you see a second dot over here

uh for but

this is not going to be this big old Fed

meeting that I think gives anybody any

clarity. I think a lot of people are

hoping for that tomorrow but it's going

to be a punt. It's going to be a punt to

the October 28th 29th meeting. we'll get

one more set of unemployment data which

really makes the beginning the our next

catalyst the first week of October

October 1st and October 3rd which means

uh you know me personally what I

mentioned in the alpha report this

morning was that I thought the cues were

not like I literally said don't go calls

on the cues for the day go consider

calls on the cues for the end of the

month okay I'm not going to talk about

price target because that's for the meat

Kevin membership but the reason I said

that is because usually the day before

the Fed you have a little bit of a

pullback It's not a surprise that you'd

have a little bit of a pullback or like

some nervousness before the Fed meeting.

And I think there one of the reasons for

that is some people are nervous that

you're going to end up getting a really

hawkish pal tomorrow. I think for the

first time in a while you get neither

hawk nor dove. You get a neutral pal

that's like look things are good right

now. Now there are concerns. That said

like talk to us at the end of the

October meeting. we'll have a whole lot

more clarity then and maybe we will

maybe we won't you know he could end up

uh uh punting then as well but uh you

know my take is this is great this so

far if you are bullish stocks and you

don't want a reason to sell your stocks

this is fantastic now I maintain that if

you want to diversify one of the best

things to do is diversifying to real

estate but I'm not going to get into the

whole house I pitch right now I'll save

you from that but broadly I I promise

you I'm looking on like a daily basis

for bearish stuff and you know look at

the 102 yield curve for example. You

know the 102 the 102 yield curve is a

fantastic proxy for where the economy is

pricing in recessionary risks right now

and we are deescalating our tensions on

the 102 yield curve. Yields are coming

down which is bullish. It's bullish real

estate. bullish stocks and the spread is

shrinking which is broadly bullish the

economy where you get like the only way

you get this to skyrocket is if you get

some really horrible jobs numbers and

they're going to have to be negative at

this point I I will go on record to say

the only way we really get a recession

is if we start getting unrevised

negative numbers which means the October

numbers come in negative the November

numbers are negative the December

numbers are negative that's going to be

bad That's going to be where you want

your trailing stops and you back out.

But it's unless we get negative any of

these low numbers at this point, people

are just going to blame on a lack of

migration. Uh and so, you know, who

cares is is basically uh where we're

going to sit. Uh so, broadly, uh I I'm

going to say on this, you know, bullish

until proven otherwise. That's what I'm

going to call it. Uh you know, we're

going to call it daddy's back. We are

bullish until proven otherwise. Uh there

are real concerns and again I'm not I'm

not saying we're not like at a 50/50

shot of a recession, but uh I I don't

see the Fed being bearish tomorrow and I

don't see the Fed panicking tomorrow. Uh

so that's my take on the Fed tomorrow.

And we've got some SAP estimates here.

Let's see what some of y'all say here.

Uh let's see here. Uh let's see here. Uh

we have somebody says Powell's going to

hawk to us. I don't think Powell's going

to hawk to us. Kevin, what's your bull

bear scale? I think I'm probably sitting

at like a, you know, I'm I'm concerned

about the labor market weakness, but

it's probably popped up to like the 49

to like five range. Probably in that

little range right there. Uh, so so it's

like I'm in the middle. Uh, kind of like

my politics. Uh, somebody says, "What if

he doesn't cut?" That's really unlikely.

If he doesn't cut, the market's going to

fall. You know, we saw the JP Morgan

forecast on that. Uh, and I agree with

it entirely. Uh it's it's it's not very

likely to me that they're not going to

cut. They would shock the market by

doing that. And inflation numbers, you

know, were not like so impressive that

we have to do that. Uh let's see here.

What else do we have here? Uh we've got

a lot of things. Okay, that's good.

Thanks, Sydney Sweeney. Exactly.

Uh okay. Yeah. Broadly, you all seem to

Jerome Powell gonna give Trump another

stroke. No, you know, the thing is

Jerome Powell could have given Trump a

stroke at the uh Jackson Hole meeting,

but he didn't.

That was a sign that Jerome Powell is

putting his sort of ego above

uh this this like let's get Trump thing.

and he's putting his ego aside and he's

saying, you know what, I will stand

there for doing what's right for the

economy, which is paying more attention

to the labor market and calling

inflation transitory. Basically, not

spotted transitory, but overtime

transitory. This means that we are going

to end up with a 25 basis point cut and

a setup for let's wait and see what the

numbers are for October. That's my take.

It was just in my opinion a relatively,

you know, boring call. Uh the somebody

says, "What's the probability of a Fed

50?" It's about 4.8% right now. So very

very low. Uh and then you have you have

Nick T. He's tweeting pictures right now

of uh the Fed.

Let's see here. He's got here we go.

Uh there's Jerome Powell. Look at that.

He's got the iPad. Oh, they've all got

the iPad. The keyboard iPads, bro. I got

the white one, too, right here. Let's

go. I could join the Fed. No way. Yeah,

it's This thing's heavy, by the way. You

carry this sucker around. But it's the

uh the white iPad. Uh the the keyboard

iPad. I love this thing. So, it's great.

That's awesome. They're all using This

is kind of actually a cool picture over

here. Uh, you've got there's Lisa Cook.

Oh, Lisa Cook. Where's They don't

show there's no picture of him. But

anyway, they're doing their This room is

a lot brighter than I thought it was. I

honestly when I had these visions of

like, you know, the boardroom for the

Fed, I always had these visions of it

being like a dark place,

which is crazy. Uh, so, uh, very

interesting. Uh, okay. So, uh, let's see

here.

That's it. That's that's the take on the

Fed. Pretty benign, honestly.

>> Why not advertise these things that you

told us here? I feel like nobody else

knows about this.

>> We'll we'll try a little advertising and

see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you.

>> Kevin Pra there, financial analyst and

YouTuber. Meet Kevin. Always great to

get your take.